Agency pitch debate—ad leaders argue whether creativity is being sacrificed for data

There is a growing debate in the ad industry over whether agencies are sacrificing the creative product by focusing too much on data and analytics to better compete with consultancies. Ad Age spoke with 10 ad professionals about whether agencies are much more focused on selling processes backed by a slew of data, and now artificial intelligence, over creative ideas in new business pitches particularly. They debated whether shops are simply keeping up with the times and marketers’ increasing demands for more proof of performance, or if they are commoditizing the creative product and “engineering” their “own demise,” as the Ad Age columnist who goes by the pseudonym M.T. Fletcher wrote in their latest opinion piece, stirring up a flurry of commentary online. See all of Ad Age’s 2024 Agency A-List winners here Many readers who swarmed social media to chime in agreed with Fletcher and expressed relief that someone finally went public with that view. Others argued that there has to be a method behind the madness, because shops can’t sell pure creative ideas anymore without the backup of data and metrics. Read all of M.T. Fletcher’s columns here “This issue isn’t as simple as pitching,” said Michelle Tang, global chief growth officer of McCann Worldgroup. “It’s all the different parts of how our industry operates. It’s tough to say this is just about a new business pitch process.” The pressure on agencies is coming from consultancies encroaching on Madison Avenue and client procurement executives squeezing agency margins, causing cuts in senior talent that negatively impact client relationships. Not only is there a sharp increase in new business pitches (decades-long AOR relationships are rare these days), but there are longer and more complex deliberations on those outcomes. Clients are also demanding more control, leaving shops to push back on giving away creative IP in pitches. Add to that the sheer number of agencies going after a shrinking pie. Howard Moggs, founder and chief growth officer of growth consultancy Uncommon, said agencies are using their “proprietary processes” to stand out in an industry that had 89,912 agencies in 2023 in the U.S. alone, per an Ibis World report. “Anyone can start an agency at the drop of a hat,” Moggs said. “All of these agencies are trying to differentiate themselves from one another. It’s really difficult to do that. So a proprietary process, a unique way of working, is something agencies can own.” See all of Ad Age’s 2024 Creativity Award winners here Meaningful or performative? Fletcher, an advertising veteran, asserted in the column that agencies are emphasizing their own “proprietary process,” which generally involves some sort of AI-powered custom approach to identify targets, develop campaigns and optimize impact. Yet, most result in meaningless and shockingly similar charts and diagrams, they said, writing, “One agency’s process looked like the blueprints to the Starship Enterprise.” Fletcher’s point is that marketing is simply not an investment that can be proved by science, even though shops are trying to make it look that way as a defensive move. “Codifying an easily replicated approach is something that was imported from the management consultancies, because they tend to sell a proven process guided by industry experts,” Fletcher wrote in an email to Ad Age. “And with more clients moving toward project-based work, there’s been a push at agencies to ‘productize’ as many things as possible that can be sold to clients as a long-tail project or workshop, either for incremental fees or as a doorway into a client not looking for an AOR relationship.” Simon Francis, executive chairman at consultancy Flock Associates, said that there’s been more of a shift to justify work. “In the old days agencies used to make ads,” said Francis. “To be different and better they just needed to show they made better ads. The reel was the deal. Simple as that. How did you get to the idea—who cares? “ “Now, it’s harder,” he said. “More complicated.” The shift toward process Much of this is coming from the need to compete with consultancies, which have access to more upstream client executives who control myriad budgets. Consultancies have long had clear, demonstrated ways of quantifying the value of their work that justifies their fees, said MilkPEP CEO and longtime marketing executive Yin Woon Rani, whose job now is almost entirely focused on marketing. “Consultancies don't seem to have a problem maintaining their fee rates, building their businesses and attracting talent, but they do have a much more rigorous way of pricing projects,” she said. “I don’t know that agencies have done a great job of explaining and defending their value to justify their fee structure.” Chief marketing officers, under more pressure than ever to prove the performance of their marketing investments, are looking for a safe haven with agencies that can demonstrate exactly the return they are going to be paying for. That often runs counter to the alchemy of the creative pitch that is heavily focused on ideas. Still, even with the shift to focus on processes, pitches are “very much about the ideas,” Tang said. What processes do is allow agencies to prove out the idea. “Often our job of selling is to provide the security theater of ‘don’t worry we’ve got you,’” for clients, Adam Phillips, former senior strategy director for Ogilvy—which now has a thriving consulting practice. “We’ve got metrics and numbers to prove you’re making the right decision.” Rani said that when evaluating shops in a pitch, she looks at how agencies are set up to deliver campaigns more than the creative ideas themselves. “Process and discipline and rigor are really necessary in this marketing ecosystem that we operate in because it’s simply so complex,” she said. “There’s so much more data to try to harness, so many more touch points in the ecosystem to keep track of, so many different forms of creative assets that need to be generated, measured and optimized. When I’m thinking about buying an agency, I'm thinking of buying a business partner who will help me across that very complicated journey.” Agencies tend to sell on three levels: “Why: Why does the work matter? What: What do we make to bring the vision to life? How: How do we do the work?” said Justin Andrews, partner and creative strategist for agency and video production shop Animus Studios. “In a world where the agency model continues to change, there is more emphasis on the how. “As clients bring more roles in-house, as smaller boutique shops take ownership of their medium, it’s easier and more comfortable to talk about the how versus why,” he said. “Project owners and creative teams want to start getting in the weeds on how to create something. But the reality is that we need to place more emphasis on the problem we need to solve. Then, it should be less about the process and more about the creative process.” Also read: In-house agencies grow in popularity Phillips said he sees the issue as more “nuanced.” “We are at a point where we have to come to clients with more than ‘Trust me, I’m a creative,’” he said. “The Super Bowl is the one advertising TV spot-centric [event] left in the media ecosystem and even that isn’t just about the ad. That 30-second spot is almost the least important part of it. It’s about the pre-rolls, the previews you do on ‘The Today Show,’ the talent you use for that spot, the subsequent surrounding material.” He added: “It’s more complicated, and you start seeing that the process is pretty important. Do you have a plan on how you are going to engage the audiences? Where are you going to talk about it? Who is going to talk about it? If your answer to that is ‘We have a gorilla riding a unicycle,’ no one is going to listen to you.” Still, Phillips said he thought the Fletcher column was “funny and I agreed with a lot of it.” He said agencies now rely on how they can “productize their process” as a “branding and selling tool” throughout a pitch—it comes up in everything from brief intros through to work examples. “As a strategist with a twinge of self-recognition, who has drawn a lot of diagrams with circles and squares and such and has a conflicted relationship with process as a selling tool, I overall absolutely agree with the author’s conclusions,” Phillips said. Fletcher said in the email to Ad Age that “over-engineered process charts are becoming a shared language across the industry, especially at the bigger agencies.” “Any great pitch is a story well told,” Fletcher said. “If a process becomes a framework that helps you outline that narrative, great, or if the process reveals a pattern that shows where the brand should go next, terrific. The problem with agencies trying to act like consultants is they often lose the plot and get lost in the plumbing. Clients don’t care about the pipes, they just want a glass of water.” Clients are also no fools, either. One procurement executive at a large well-known tech company, speaking on condition of anonymity because she was not authorized to speak on record, said “a lot of marketers use data as a crutch.” But she said she sees through the fluff when it comes to these “proprietary processes.” The procurement executive added that she values not how an agency showcases its process or cost efficiencies in pitches, but how the agency demonstrates how their teams work together to get to an idea. The best pitch she ever oversaw “was very expensive and had a lot of collaboration,” she said. “Marketing leaders, particularly new in their position, love the show, the process, the spectacle,” the procurement executive said. “There is a lot of pressure on marketing leadership to spend less or show what they’re doing. That’s not how marketing works. Finance will see the biggest number: $100 million-plus spent on media [and ask] ‘Where is that money going?’ They don’t inherently believe marketing is being a good steward of company money. I find that is not true. Marketing leaders are good stewards of company money.” Francis said blaming procurement is a tired excuse. “I’m also kind of done with ‘Procurement is killing agencies,’” Francis said. “They aren’t. We run pitches, hundreds of them. We have never ever had a single pitch decided on cost.” Owning their IP Tang said a lot of the issues Fletcher brought up in the column also go back to agencies not wanting to give up creative ideas for free in a pitch anymore, so they focus more on the process of how they get to a campaign. “I'm not really a fan of spec creative [work done specifically for a pitch],” Rani said. “I’ve run a number of pitches in my career [and] I've asked for strategic thinking, but I'm very careful not to ask for illustrative creative. My assumption is that if you're an agency that's in business, you can make creative, right?” The procurement executive said she advises marketers not to use spec, because most times agencies come up with similar ideas anyway. She said she’s heard of some brands paying a mere “$5,000 or $10,000” to an agency for spec work, in order to give them some compensation for the ideas, while “the agency is investing $150,000 [to pitch] … It’s undervaluing the work.” These processes are also about showcasing what is unique about the agency, Tang said. “At the end of the day, it’s still about the talent and the chemistry and the chemistry of the team. [The process] actually allows clients to know the agency better. When we go to market, we talk about what we do, which is build brands. The work we do proves that superpower out. We don’t necessarily have to do that work in a vacuum [for a pitch] for that to show.” Moving forward Organizations including the 4A’s and ANA have long been proponents of simplifying the pitch process and changing the way agencies are compensated, to move away from charging hourly rates—two areas that some think will solve a lot of agencies’ problems and stop the commoditization of creativity. The issue, according to 4A’s CEO and President Marla Kaplowitz, stems from agencies having to focus too much on navigating increasingly complex new business pitches in which the RFP process is drawn out with additional meetings unnecessarily being called. “It always comes down to one thing: chemistry,” Kaplowitz said. “Selecting an agency is an emotional decision based on the people and a belief that they are the right group to partner with to achieve your objectives. This is yet another reason why we need to transform the new business process.” Fletcher said in an email to Ad Age that agency compensation models “definitely” need to change to become performance-based. “Billing for hours is a disincentive to bring senior talent to bear on a problem and solve it quickly,” Fletcher wrote. “A winning campaign can change the fortunes of an entire company by increasing retention, stealing share, driving advocacy and repeat purchase, and so on. The post-holding company model has never made sense in terms of the fortune a great agency delivers to the bottom line versus what it gets paid.” Moggs said agencies should be paid for the problem-solving value they bring to their clients, such as increasing lifelong customers or making a brand worth more money. “[Agencies] will say, ‘Oh, we’ve got a process. We’re good at this service in this category.’ Unfortunately, that’s not good enough anymore,” Moggs said. “Focus on the expertise and the valuable outcomes you deliver and position your agency around those things. There are only so many services but hundreds and hundreds of problems.”

Agency pitch debate—ad leaders argue whether creativity is being sacrificed for data

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